“Two hypotheses suggest themselves as potential explanations for this reversal. First, gold is seen as a safe haven and desirable reserve asset in periods of high economic, financial and geopolitical uncertainty, and when returns on reserve currencies are low, two conditions that have been prevalent in recent years.…In addition, gold is favored by custom and tradition: central banks and governments have long held gold reserves.”
USAGOLD note: Three internationally recognized economists dissect what’s behind the move back to gold among emerging central banks. Arslanalp is a macroeconomist at the International Monetary Fund. Eichengreen is a well-known economic historian at the University of California, Berkley. Chima Simpson-Bell is also an economist with the International Monetary Fund.
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